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PAG LIN 1 1 SENATE FILE 497 1 2 1 3 AN ACT 1 4 RELATING TO THE GOVERNANCE OF THE IOWA PUBLIC EMPLOYEES' 1 5 RETIREMENT SYSTEM AND PROVIDING AN EFFECTIVE DATE. 1 6 1 7 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 1 8 1 9 Section 1. Section 12.8, unnumbered paragraph 3, Code 1 10 2001, is amended to read as follows: 1 11 The treasurer of state, with the approval of the investment 1 12 board of the Iowa public employees' retirement system, may 1 13 conduct a program of lending securities in the Iowa public 1 14 employees' retirement system portfolio. When securities are 1 15 loaned as provided by this paragraph, the treasurer shall act 1 16 in the manner provided for investment of moneys in the Iowa 1 17 public employees' retirement fund under section97B.797B.7A. 1 18 The treasurer of state shall report at least annually to the 1 19 investment board of the Iowa public employees' retirement 1 20 system on the program and shall provide additional information 1 21 on the program upon the request of the investment board or the 1 22 employees of the Iowa public employees' retirement system 1 23 division of the department of personnel. 1 24 Sec. 2. Section 12B.10, subsection 4, paragraph f, Code 1 25 2001, is amended to read as follows: 1 26 f. Investments authorized for the Iowa public employees' 1 27 retirement system in section97B.7, subsection 2, paragraph1 28"b"97B.7A, except that investment in common stocks is not 1 29 permitted. 1 30 Sec. 3. Section 12C.5, Code 2001, is amended to read as 1 31 follows: 1 32 12C.5 REFUSAL OF DEPOSITS – PROCEDURE. 1 33 If the approved depositories will not accept the deposits 1 34 under the conditions prescribed or authorized in this chapter, 1 35 the funds may be deposited, on the same or better terms as 2 1 were offered to the depositories, in one or more approved 2 2 depositories conveniently located within the state. 2 3 The treasurer of state may invest in any of the investments 2 4 authorized for the Iowa public employees' retirement system in 2 5 section97B.7, subsection 2, paragraph "b"97B.7A except that 2 6 investment in common stocks shall not be permitted. 2 7 Sec. 4. Section 12C.10, Code 2001, is amended to read as 2 8 follows: 2 9 12C.10 INVESTMENT OF FUNDS CREATED BY ELECTION. 2 10 The governing council or board, who by law have control of 2 11 any fund created by direct vote of the people, may invest any 2 12 portion of the fund not currently needed, in investments 2 13 authorized in section 12B.10. The treasurer of state may 2 14 invest in any of the investments authorized for the Iowa 2 15 public employees' retirement system in section97B.7,2 16subsection 2, paragraph "b"97B.7A except that investment in 2 17 common stocks shall not be permitted. Interest or earnings on 2 18 such funds shall be credited as provided in section 12C.7, 2 19 subsection 2. 2 20 Sec. 5. Section 19A.1, subsection 3, paragraph b, Code 2 21 2001, is amended to read as follows: 2 22 b. The investment board of the Iowa public employees' 2 23 retirement system created by section97B.897B.8A. 2 24 Sec. 6. Section 97A.7, subsection 2, Code 2001, is amended 2 25 to read as follows: 2 26 2. The several funds created by this chapter may be 2 27 invested in any investments authorized for the Iowa public 2 28 employees' retirement system in section97B.7, subsection 2,2 29paragraph "b"97B.7A. 2 30 Sec. 7. Section 97B.1, Code 2001, is amended to read as 2 31 follows: 2 32 97B.1 SYSTEM CREATED – ORGANIZATIONAL DEFINITIONS. 2 33 1. The "Iowa Public Employees' Retirement System" is 2 34 created. The Iowa public employees' retirement systemis2 35 division, a separate and distinct division within the 3 1 department of personnel, shall administer the system. 3 2 2. As used in this chapter unless the context requires 3 3 otherwise: 3 4 a. "Board" means the investment board created by section 3 597B.897B.8A. 3 6 b. "Chief executive officer" means the chief executive 3 7 officer of the Iowa public employees' retirement system 3 8 division, notwithstanding section 7E.2, subsection 3, 3 9 paragraph "c", subparagraph (1). 3 10 c. "Committee" means the benefits advisory committee 3 11 created by section 97B.8B. 3 12b.d. "DepartmentDivision" means thedepartment of3 13personnelIowa public employees' retirement system division. 3 14c. "Director" means the director of the department of3 15personnel.3 16d.e. "System" means the Iowa public employees' retirement 3 17 system. 3 18 Sec. 8. NEW SECTION. 97B.3A CHIEF EXECUTIVE OFFICER – 3 19 APPOINTMENT AND QUALIFICATIONS. 3 20 1. The administrator of the division is the chief 3 21 executive officer. The chief executive officer shall be 3 22 appointed by the governor subject to confirmation by the 3 23 senate. A vacancy shall be filled for the unexpired portion 3 24 of the term in the same manner as a full-term appointment is 3 25 made. The governor may remove the chief executive officer for 3 26 malfeasance in office, or for any cause that renders the chief 3 27 executive officer ineligible, incapable, or unfit to discharge 3 28 the duties of the office. 3 29 2. The qualifications for appointment as the chief 3 30 executive officer shall include management-level pension fund 3 31 administration experience. The qualifications for appointment 3 32 as the chief executive officer shall also include a 3 33 demonstrated knowledge of all aspects of pension fund 3 34 administration, including financial management, investment 3 35 asset management, benefit design and delivery, legal 4 1 administration, and operations administration. The chief 4 2 executive officer shall not be selected on the basis of 4 3 political affiliation, and while employed as the chief 4 4 executive officer, shall not be a member of a political 4 5 committee, participate in a political campaign, or be a 4 6 candidate for a partisan elective office, and shall not 4 7 contribute to a political campaign fund, except that the chief 4 8 executive officer may designate on the checkoff portion of the 4 9 state or federal income tax return, or both, a party or 4 10 parties to which a contribution is made pursuant to the 4 11 checkoff. The chief executive officer shall not hold any 4 12 other office under the laws of the United States or of this or 4 13 any state and shall devote full time to the duties of office. 4 14 Sec. 9. Section 97B.4, Code 2001, is amended by striking 4 15 the section and inserting in lieu thereof the following: 4 16 97B.4 ADMINISTRATION OF SYSTEM – POWERS AND DUTIES OF 4 17 DIVISION – IMMUNITY. 4 18 1. CHIEF EXECUTIVE OFFICER. The division, through the 4 19 chief executive officer, shall administer this chapter. The 4 20 chief executive officer shall also be the division's statutory 4 21 designee with respect to the rulemaking power. 4 22 2. GENERAL AUTHORITY. 4 23 a. The division may adopt, amend, waive, or rescind rules, 4 24 employ persons, execute contracts with outside parties, make 4 25 expenditures, require reports, make investigations, and take 4 26 other action it deems necessary for the administration of the 4 27 system in conformity with the requirements of this chapter, 4 28 the applicable provisions of the Internal Revenue Code, and 4 29 all other applicable federal and state laws. The rules shall 4 30 be effective upon compliance with chapter 17A. 4 31 b. The division may delegate to any person such authority 4 32 as it deems reasonable and proper for the effective 4 33 administration of this chapter, and may bond any person 4 34 handling moneys or signing checks under this chapter. 4 35 c. In administering this chapter, the division shall enter 5 1 into a biennial agreement with the department of personnel 5 2 concerning the sharing of resources between the division and 5 3 department which are of benefit to each and which are 5 4 consistent with the mission of the division and the 5 5 department. The budget program for the division shall be 5 6 established by the chief executive officer in consultation 5 7 with the board and other staff of the division and shall be 5 8 compiled by the department of personnel in collaboration with 5 9 the division and submitted on behalf of the division by the 5 10 department pursuant to section 8.23. 5 11 3. PERSONNEL. 5 12 a. CHIEF INVESTMENT OFFICER. The chief executive officer, 5 13 following consultation with the board, shall employ a chief 5 14 investment officer who shall be appointed pursuant to chapter 5 15 19A and shall be responsible for administering the investment 5 16 program for the retirement fund pursuant to the investment 5 17 policies of the board. 5 18 b. CHIEF BENEFITS OFFICER. The chief executive officer, 5 19 following consultation with the benefits advisory committee, 5 20 shall employ a chief benefits officer who shall be appointed 5 21 pursuant to chapter 19A and shall be responsible for 5 22 administering the benefits and other services provided under 5 23 the system. 5 24 c. ACTUARY. The division shall employ an actuary who 5 25 shall be selected by the board and shall serve at the pleasure 5 26 of the board. The actuary shall be the technical advisor for 5 27 the system on matters regarding the operation of the 5 28 retirement fund. 5 29 d. DIVISION EMPLOYEES. Subject to other provisions of 5 30 this chapter, the division may employ all other personnel as 5 31 necessary for the administration of the system. The maximum 5 32 number of full-time equivalent employees specified by the 5 33 general assembly for the division for administration of the 5 34 system for a fiscal year shall not be reduced by any authority 5 35 other than the general assembly. The personnel of the 6 1 division shall be appointed pursuant to chapter 19A. The 6 2 division shall not appoint or employ a person who is an 6 3 officer or committee member of a political party organization 6 4 or who holds or is a candidate for a partisan elective public 6 5 office. 6 6 e. LEGAL ADVISORS. The division may employ attorneys and 6 7 contract with attorneys and legal firms for the provision of 6 8 legal counsel and advice in the administration of this chapter 6 9 and chapter 97C. 6 10 f. OUTSIDE ADVISORS. The division may execute contracts 6 11 with persons outside state government, including investment 6 12 advisors, consultants, and managers, in the administration of 6 13 this chapter. However, a contract with an investment manager 6 14 or investment consultant shall not be executed by the division 6 15 pursuant to this paragraph without the prior approval by the 6 16 board of the hiring of the investment manager or investment 6 17 consultant. 6 18 4. REPORTS. 6 19 a. ANNUAL REPORT TO GOVERNOR. Not later than the 6 20 fifteenth day of December of each year, the division shall 6 21 submit to the governor a report covering the administration 6 22 and operation of this chapter during the preceding fiscal year 6 23 and shall make recommendations for amendments to this chapter. 6 24 The report shall include a balance sheet of the moneys in the 6 25 retirement fund. The report shall also include information 6 26 concerning the investment management expenses for the 6 27 retirement fund for each fiscal year expressed as a percent of 6 28 the market value of the retirement fund investment assets, 6 29 including the information described in section 97B.7, 6 30 subsection 3, paragraph "d". The information provided under 6 31 this paragraph shall also include information on the 6 32 investment policies and investment performance of the 6 33 retirement fund. In providing this information, to the extent 6 34 possible, the division shall include the total investment 6 35 return for the entire fund, for portions of the fund managed 7 1 by investment managers, and for internally managed portions of 7 2 the fund, and the cost of managing the fund per thousand 7 3 dollars of assets. The performance shall be based upon market 7 4 value, and shall be contrasted with relevant market indices 7 5 and with performances of pension funds of similar asset size. 7 6 b. ANNUAL STATEMENT TO MEMBERS. The division shall 7 7 prepare and distribute to the members, at the expense of the 7 8 retirement fund, an annual statement of the member's account 7 9 and, in such a manner as the division deems appropriate, other 7 10 information concerning the system. 7 11 c. ACTUARIAL INVESTIGATION. During calendar year 2002, 7 12 and every four years thereafter, the division shall cause an 7 13 actuarial investigation to be made of all experience under the 7 14 retirement system. Pursuant to such an investigation, the 7 15 division shall, from time to time, determine upon an actuarial 7 16 basis the condition of the system and shall report to the 7 17 general assembly its findings and recommendations. 7 18 d. ANNUAL VALUATION OF ASSETS. The division shall cause 7 19 an annual actuarial valuation to be made of the assets and 7 20 liabilities of the system and shall prepare an annual 7 21 statement of the amounts to be contributed under this chapter, 7 22 and shall publish annually such valuation of the assets and 7 23 liabilities and the statement of receipts and disbursements of 7 24 the system. Based upon the actuarial methods and assumptions 7 25 adopted by the board for the annual valuation, the division 7 26 shall certify to the governor the contribution rates 7 27 determined thereby as the rates necessary and sufficient for 7 28 members and employers to fully fund the benefits and 7 29 retirement allowances being credited. 7 30 5. INVESTMENTS. The division, through the chief 7 31 investment officer, shall invest, in accordance with the 7 32 investment policy and goal statement established by the board, 7 33 the portion of the retirement fund which, in the judgment of 7 34 the division, is not needed for current payment of benefits 7 35 under this chapter subject to the requirements of section 8 1 97B.7A. 8 2 6. OLD RECORDS. The division may destroy or dispose of 8 3 such original reports or records as have been properly 8 4 recorded or summarized in the permanent records of the 8 5 division and are deemed by the chief executive officer to be 8 6 no longer necessary to the proper administration of this 8 7 chapter. The destruction or disposition shall be made only by 8 8 order of the chief executive officer. Records of deceased 8 9 members of the system may be destroyed ten years after the 8 10 later of the final payment made to a third party on behalf of 8 11 the member or the death of the member. Any moneys received 8 12 from the disposition of these records shall be deposited to 8 13 the credit of the retirement fund subject to rules adopted by 8 14 the division. 8 15 7. IMMUNITY. The division, employees of the division, the 8 16 board, the members of the board, and the treasurer of state 8 17 are not personally liable for actions or omissions under this 8 18 chapter that do not involve malicious or wanton misconduct 8 19 even if those actions or omissions violate the standards 8 20 established in section 97B.7A. 8 21 Sec. 10. Section 97B.7, Code 2001, is amended by striking 8 22 the section and inserting in lieu thereof the following: 8 23 97B.7 FUND CREATED – EXCLUSIVE BENEFIT – STANDING 8 24 APPROPRIATIONS. 8 25 1. There is hereby created as a special fund, separate and 8 26 apart from all other public moneys or funds of this state, the 8 27 "Iowa Public Employees' Retirement Fund", hereafter called the 8 28 "retirement fund". The retirement fund shall consist of all 8 29 moneys collected under this chapter, together with all 8 30 interest, dividends, and rents thereon, and shall also include 8 31 all securities or investment income and other assets acquired 8 32 by and through the use of the moneys belonging to the 8 33 retirement fund and any other moneys that have been paid into 8 34 the retirement fund. 8 35 2. The treasurer of the state of Iowa is hereby made the 9 1 custodian of the retirement fund and shall hold and disburse 9 2 the retirement fund in accordance with the requirements of 9 3 this chapter. As custodian, the treasurer shall be authorized 9 4 to disburse moneys in the retirement fund upon warrants drawn 9 5 by the director of revenue and finance pursuant to the order 9 6 of the division. The treasurer shall not select any bank or 9 7 other third party for the purposes of investment asset 9 8 safekeeping, other custody, or settlement services without 9 9 prior consultation with the board. 9 10 3. All moneys which are paid or deposited into the fund 9 11 are appropriated and made available to the division to be used 9 12 for the exclusive benefit of the members and their 9 13 beneficiaries or contingent annuitants as provided in this 9 14 chapter: 9 15 a. To be used by the division for the payment of claims 9 16 for benefits under this chapter. 9 17 b. To be used by the division to pay refunds provided for 9 18 in this chapter. 9 19 c. To be used for the costs of administering the system, 9 20 including up to $50,000 per fiscal year for actual and 9 21 necessary expenses of the benefits advisory committee. If as 9 22 a result of action under section 8.31, the governor has 9 23 reduced the moneys appropriated from the retirement fund to 9 24 the division for salaries, support, maintenance, and other 9 25 operational purposes to pay the costs of the system for a 9 26 fiscal year, it is the intent of the general assembly that the 9 27 amount by which the appropriation has been reduced should be 9 28 transferred from the retirement fund to the division for 9 29 salaries, support, maintenance, and other operational purposes 9 30 to pay the costs of the system for that fiscal year. 9 31 d. To be used to pay for investment management expenses 9 32 incurred in the management of the retirement fund. Expenses 9 33 incurred pursuant to this paragraph shall be charged to the 9 34 investment income of the retirement fund. However, the amount 9 35 appropriated for a fiscal year under this paragraph shall not 10 1 exceed four-tenths of one percent of the market value of the 10 2 retirement fund. 10 3 Sec. 11. NEW SECTION. 97B.7A INVESTMENT AND MANAGEMENT 10 4 OF RETIREMENT FUND – STANDARDS – IMMUNITY. 10 5 1. INVESTMENT AND INVESTMENT POLICY STANDARDS. In 10 6 establishing the investment policy of the retirement fund and 10 7 providing for the investment of the retirement fund, the 10 8 division and board shall do the following: 10 9 a. Exercise the judgment and care, under the circumstances 10 10 then prevailing, which persons of prudence, discretion, and 10 11 intelligence exercise in the management of their own affairs, 10 12 not for the purpose of speculation, but with regard to the 10 13 permanent disposition of the funds, considering the probable 10 14 income, as well as the probable safety, of their capital. 10 15 b. Give appropriate consideration to those facts and 10 16 circumstances that the division and board know or should know 10 17 are relevant to the particular investment or investment policy 10 18 involved, including the role the investment plays in the total 10 19 value of the retirement fund. 10 20 c. For the purposes of this subsection, appropriate 10 21 consideration includes, but is not limited to, a determination 10 22 that the particular investment or investment policy is 10 23 reasonably designed to further the purposes of the system, 10 24 taking into consideration the risk of loss and the opportunity 10 25 for gain or income associated with the investment or 10 26 investment policy and consideration of the following factors 10 27 as they relate to the retirement fund: 10 28 (1) The composition of the retirement fund with regard to 10 29 diversification. 10 30 (2) The liquidity and current return of the investments in 10 31 the retirement fund relative to the anticipated cash flow 10 32 requirements of the system. 10 33 (3) The projected return of the investments relative to 10 34 the funding objectives of the retirement system. 10 35 2. INVESTMENT ACQUISITIONS. Within the limitations of the 11 1 investment standards prescribed in this section, the system 11 2 may acquire and retain every kind of property and every kind 11 3 of investment which persons of prudence, discretion, and 11 4 intelligence acquire or retain for their own account. 11 5 Consistent with this section, investments shall be made in a 11 6 manner that will enhance the economy of this state, and in 11 7 particular, will result in increased employment of the 11 8 residents of this state. Investments of moneys in the 11 9 retirement fund are not subject to sections 73.15 through 11 10 73.21. 11 11 3. LIABILITY – REIMBURSEMENT. Except as provided in 11 12 section 97B.4, subsection 7, if there is loss to the 11 13 retirement fund, the treasurer of state, the division, the 11 14 employees of the division, the members of the board severally, 11 15 and the board are not personally liable, and the loss shall be 11 16 charged against the retirement fund. There is appropriated 11 17 from the retirement fund, the amount required to cover a loss. 11 18 4. INVESTMENT PROCEDURES. In managing the investment of 11 19 the retirement fund, the division, in accordance with the 11 20 investment policy established by the board, is authorized to 11 21 do the following: 11 22 a. To sell any securities or other property in the 11 23 retirement fund and reinvest the proceeds when such action may 11 24 be deemed advisable by the division for the protection of the 11 25 retirement fund or the preservation of the value of the 11 26 investment. Such sale of securities or other property of the 11 27 retirement fund and reinvestment shall only be made in 11 28 accordance with policies of the board in the manner and to the 11 29 extent provided in this chapter. 11 30 b. To subscribe for the purchase of securities for future 11 31 delivery in anticipation of future income. The securities 11 32 shall be paid for by anticipated income or from funds from the 11 33 sale of securities or other property held by the retirement 11 34 fund. 11 35 c. To pay for securities directed to be purchased upon the 12 1 receipt of the purchasing bank's paid statement or paid 12 2 confirmation of purchase. 12 3 5. TRAVEL. In the administration of the investment of 12 4 moneys in the retirement fund, employees of the division and 12 5 members of the board may travel outside the state for the 12 6 purpose of meeting with investment firms and consultants and 12 7 attending conferences and meetings to fulfill their fiduciary 12 8 responsibilities. This travel is not subject to section 12 9 421.38, subsection 2. 12 10 Sec. 12. NEW SECTION. 97B.8A INVESTMENT BOARD. 12 11 1. BOARD ESTABLISHED. A board is established to be known 12 12 as the "Investment Board of the Iowa Public Employees' 12 13 Retirement System", referred to in this chapter as the 12 14 "board". The duties of the board are to establish policy, and 12 15 review its implementation, in matters relating to the 12 16 investment of the retirement fund. The board shall be the 12 17 trustee of the retirement fund. 12 18 2. INVESTMENT REVIEW. a. At least annually the board 12 19 shall review the investment policies and procedures used by 12 20 the board and division, and shall hold a public meeting on the 12 21 investment policies and investment performance of the 12 22 retirement fund. Following its review and the public meeting, 12 23 the board shall, pursuant to the requirements of section 12 24 97B.7A, and in consultation with the chief investment officer 12 25 and other relevant personnel of the division, establish an 12 26 investment policy and goal statement that shall direct the 12 27 investment activities concerning the retirement fund. 12 28 b. The board shall review and approve, prior to the 12 29 execution of a contract with the division, the hiring of each 12 30 investment manager and investment consultant outside of state 12 31 government. 12 32 c. The board shall be involved in the performance 12 33 evaluation of the chief investment officer. 12 34 3. ACTUARIAL RESPONSIBILITIES. 12 35 a. The board shall select the actuary to be employed by 13 1 the system as provided in section 97B.4. 13 2 b. The board shall, in consultation with the chief 13 3 executive officer, the actuary, and other relevant personnel 13 4 of the division, adopt from time to time mortality tables and 13 5 all other necessary factors for use in actuarial calculations 13 6 required in connection with the system. The board shall also 13 7 adopt the actuarial methods and assumptions to be used by the 13 8 actuary for the annual valuation of assets as required by 13 9 section 97B.4. 13 10 4. MEMBERSHIP. 13 11 a. The board shall consist of eleven members, including 13 12 seven voting members and four nonvoting members. The voting 13 13 members shall be as follows: 13 14 (1) Three public members, appointed by the governor, who 13 15 are not members of the system and who each have substantial 13 16 institutional investment experience or substantial 13 17 institutional financial experience. 13 18 (2) Three members, appointed by the governor, who are 13 19 members of the system. Prior to the appointment by the 13 20 governor of a member of the board under this subparagraph, the 13 21 benefits advisory committee shall submit a slate of at least 13 22 two nominees per position to the governor for the governor's 13 23 consideration. The governor is not required to appoint a 13 24 member from the slate submitted. Of the three members 13 25 appointed, one shall be an active member who is an employee of 13 26 a school district, area education agency, or merged area; one 13 27 shall be an active member who is not an employee of a school 13 28 district, area education agency, or merged area; and one shall 13 29 be a retired member of the system. 13 30 (3) The treasurer of state. 13 31 The nonvoting members of the board shall be two state 13 32 representatives, one appointed by the speaker of the house of 13 33 representatives and one by the minority leader of the house, 13 34 and two state senators, one appointed by the majority leader 13 35 of the senate and one by the minority leader of the senate. 14 1 b. Four voting members of the board shall constitute a 14 2 quorum. 14 3 c. The three members who have substantial institutional 14 4 investment experience or substantial institutional financial 14 5 experience, and the member who is a retired member of the 14 6 system, shall be paid their actual expenses incurred in the 14 7 performance of their duties and shall receive a per diem as 14 8 specified in section 7E.6 for each day of service not 14 9 exceeding forty days per year. Legislative members shall be 14 10 paid the per diem and expenses specified in section 2.10, for 14 11 each day of service. The per diem and expenses of the 14 12 legislative members shall be paid from funds appropriated 14 13 under section 2.12. The members who are active members of the 14 14 system and the treasurer of state shall be paid their actual 14 15 expenses incurred in the performance of their duties as 14 16 members of the board and the performance of their duties as 14 17 members of the board shall not affect their salaries, 14 18 vacations, or leaves of absence for sickness or injury. 14 19 d. The appointive terms of the members appointed by the 14 20 governor are for a period of six years beginning and ending as 14 21 provided in section 69.19. If there is a vacancy in the 14 22 membership of the board for one of the members appointed by 14 23 the governor, the governor has the power of appointment. 14 24 Gubernatorial appointees to this board are subject to 14 25 confirmation by the senate. 14 26 5. CLOSED SESSIONS. In addition to the reasons provided 14 27 in section 21.5, subsection 1, the board may hold a closed 14 28 session pursuant to the requirements of section 21.5 of that 14 29 portion of a board meeting in which financial or commercial 14 30 information is provided to or discussed by the board if the 14 31 board determines that disclosure of such information could 14 32 result in a loss to the system or to the provider of the 14 33 information. 14 34 Sec. 13. NEW SECTION. 97B.8B BENEFITS ADVISORY 14 35 COMMITTEE. 15 1 1. COMMITTEE ESTABLISHED. A benefits advisory committee 15 2 shall be established whose duty is to consider and make 15 3 recommendations to the division and the general assembly 15 4 concerning the provision of benefits and services to members 15 5 of the system. 15 6 2. MEMBERSHIP. The benefits advisory committee shall be 15 7 comprised of representatives of constituent groups concerned 15 8 with the system, and shall include representatives of 15 9 employers, active members, and retired members. In addition, 15 10 the director of the department of personnel and a member of 15 11 the public selected by the voting members of the committee 15 12 shall serve as members of the committee. The division shall 15 13 adopt rules under chapter 17A to provide for the selection of 15 14 members to the committee and the election of the voting 15 15 members of the committee. 15 16 3. VOTING MEMBERS. Of the members who comprise the 15 17 committee, nine members shall be voting members. Except as 15 18 otherwise provided by this subsection, the voting members 15 19 shall be elected by the members of the committee from the 15 20 membership of the committee. Of the nine voting members of 15 21 the committee, four shall represent covered employers, and 15 22 four shall represent the members of the system. Of the four 15 23 voting members representing employers, one shall be the 15 24 director of the department of personnel, one shall be a member 15 25 of a constituent group that represents cities, one shall be a 15 26 member of a constituent group that represents counties, and 15 27 one shall be a member of a constituent group that represents 15 28 local school districts. Of the four voting members who 15 29 represent members of the system, one shall be a member of a 15 30 constituent group that represents teachers. The ninth voting 15 31 member of the committee shall be a citizen who is not a member 15 32 of the system and who is elected by the other voting members 15 33 of the committee. 15 34 4. DUTIES. 15 35 a. At least every two years, the benefits advisory 16 1 committee shall review the benefits and services provided to 16 2 members under this chapter, and the voting members of the 16 3 committee shall make recommendations to the division and the 16 4 general assembly concerning the services provided to members 16 5 and the benefits, benefits policy, and benefit goals, provided 16 6 under this chapter. 16 7 b. The benefits advisory committee shall be involved in 16 8 the performance evaluation of the chief benefits officer. 16 9 c. Upon the expiration of the term of office of or a 16 10 vacancy concerning one of the three members of the investment 16 11 board described in section 97B.8A, subsection 4, paragraph 16 12 "a", subparagraph (2), the voting members of the committee 16 13 shall submit to the governor the names of at least two 16 14 nominees who meet the requirements specified in that 16 15 subparagraph. The governor may appoint the member from the 16 16 list submitted by the committee. 16 17 5. TERMS OF VOTING MEMBERS. Except for the director of 16 18 the department of personnel and as otherwise provided in the 16 19 rules for the initial selection of voting members of the 16 20 committee, each member selected to be a voting member shall 16 21 serve as a voting member for three years. Terms for voting 16 22 members begin on May 1 in the year of selection and expire on 16 23 April 30 in the year of expiration. Vacancies shall be filled 16 24 in the same manner as the original selections. A vacancy 16 25 shall be filled for the unexpired term. 16 26 6. EXPENSES. The members who are not active members of 16 27 the system shall be paid their actual expenses incurred in the 16 28 performance of their duties and shall receive a per diem as 16 29 specified in section 7E.6 for each day of service not 16 30 exceeding forty days per year. The members who are active 16 31 members of the system and the director of the department of 16 32 personnel shall be paid their actual expenses incurred in the 16 33 performance of their duties as members of the committee and 16 34 the performance of their duties as members of the committee 16 35 shall not affect their salaries, vacations, or leaves of 17 1 absence for sickness or injury. However, the benefits 17 2 advisory committee shall not incur any additional expenses in 17 3 fulfilling its duties as provided by this section without the 17 4 express written authority of the chief executive officer. 17 5 Sec. 14. Section 97B.20A, Code 2001, is amended to read as 17 6 follows: 17 7 97B.20A APPEAL PROCEDURE. 17 8 Members and third-party payees may appeal any decision made 17 9 by thedepartmentdivision that affects their rights under 17 10 this chapter. The appeal shall be filed with thedepartment17 11 division within thirty days after the notification of the 17 12 decision was mailed to the party's last known mailing address, 17 13 or the decision of thedepartmentdivision is final. If the 17 14 party appeals the decision of thedepartmentdivision, the 17 15departmentdivision shall conduct an internal review of the 17 16 decision and the chiefbenefitsexecutive officer shall notify 17 17 the individual who has filed the appeal in writing of the 17 18department'sdivision's decision. The individual who has 17 19 filed the appeal may file an appeal of thedepartment's17 20 division's final decision with thedepartmentdivision under 17 21 chapter 17A by notifying thedepartmentdivision of the appeal 17 22 in writing within thirty days after the notification of its 17 23 final decision was mailed to the party's last known mailing 17 24 address. Once notified, thedepartmentdivision shall forward 17 25 the appeal to the department of inspections and appeals. 17 26 Sec. 15. Section 97B.25, Code 2001, is amended to read as 17 27 follows: 17 28 97B.25 APPLICATIONS FOR BENEFITS. 17 29 A representative designated by the chiefbenefitsexecutive 17 30 officer and referred to in this chapter as a retirement 17 31 benefits officer shall promptly examine applications for 17 32 retirement benefits and on the basis of facts found shall 17 33 determine whether or not the claim is valid. If the claim is 17 34 valid, the retirement benefits officer shall send a 17 35 notification to the member stating the option the member has 18 1 selected pursuant to section 97B.51, the month with respect to 18 2 which benefits shall commence, and the monthly benefit amount 18 3 payable. If the claim is invalid, the retirement benefits 18 4 officer shall promptly notify the applicant and any other 18 5 interested party of the decision and the reasons. A 18 6 retirement application shall not be amended or revoked by the 18 7 member once the first retirement allowance is paid. A 18 8 member's death during the first month of entitlement shall not 18 9 invalidate an approved application. 18 10 Sec. 16. Section 257B.20, subsection 4, Code 2001, is 18 11 amended to read as follows: 18 12 4. In any investments authorized for the Iowa public 18 13 employees' retirement system in section97B.7, subsection 2,18 14paragraph "b"97B.7A, except that investment in common stocks 18 15 shall not be permitted. 18 16 Sec. 17. Section 411.7, subsection 2, Code 2001, is 18 17 amended to read as follows: 18 18 2. The secretary of the board of trustees shall invest, in 18 19 accordance with the investment policy established by the board 18 20 of trustees, the portion of the fund established in section 18 21 411.8 which in the judgment of the board is not needed for 18 22 current payment of benefits under this chapter in investments 18 23 authorized in section97B.7, subsection 2, paragraph "b"18 24 97B.7A, for moneys in the Iowa public employees' retirement 18 25 fund. 18 26 Sec. 18. Section 602.9111, subsection 1, Code 2001, is 18 27 amended to read as follows: 18 28 1. So much of the judicial retirement fund as may not be 18 29 necessary to be kept on hand for the making of disbursements 18 30 under this article shall be invested by the treasurer of state 18 31 in any investments authorized for the Iowa public employees' 18 32 retirement system in section97B.7, subsection 2, paragraph18 33"b"97B.7A, and the earnings therefrom shall be credited to 18 34 the fund. The treasurer of state may execute contracts and 18 35 agreements with investment advisors, consultants, and 19 1 investment management and benefit consultant firms in the 19 2 administration of the judicial retirement fund. 19 3 Sec. 19. INVESTMENT BOARD TRANSITION. 19 4 1. Notwithstanding provisions of section 97B.8A, as 19 5 enacted in this Act, to the contrary, the new investment board 19 6 of the Iowa public employees' retirement system shall, on July 19 7 1, 2002, consist of the following members, who shall serve the 19 8 following terms: 19 9 a. The members of the investment board established under 19 10 section 97B.8, Code 2001, who are an active member who is an 19 11 employee of a school district, area education agency, or 19 12 merged area; an active member who is not an employee of a 19 13 school district, area education agency, or merged area; and a 19 14 retired member, shall cease membership on the investment board 19 15 and commence membership on the new investment board 19 16 established under section 97B.8A on July 1, 2002. The terms 19 17 of these members on the investment board established under 19 18 section 97B.8A shall expire on the same date as their terms 19 19 would have expired on the investment board in accordance with 19 20 section 97B.8, Code 2001. 19 21 b. The members of the investment board established under 19 22 section 97B.8, Code 2001, who are an executive of a domestic 19 23 life insurance company, an executive of a state or national 19 24 bank, and an executive of an industrial corporation located 19 25 within the state of Iowa, shall cease membership on the 19 26 investment board and commence membership on the new investment 19 27 board established under section 97B.8A on July 1, 2002. The 19 28 terms of these members on the new investment board established 19 29 under section 97B.8A shall expire on the same date as their 19 30 terms would have expired on the investment board in accordance 19 31 with section 97B.8, Code 2001. Upon expiration of each of 19 32 these member's term of office, the governor shall appoint a 19 33 member to the board consistent with the requirements of 19 34 section 97B.8A, subsection 4, paragraph "a", subparagraph (1). 19 35 c. The members of the investment board established under 20 1 section 97B.8, Code 2001, who are legislative members shall 20 2 cease membership on the investment board and commence 20 3 membership on the new investment board established under 20 4 section 97B.8A on July 1, 2002. Two additional legislative 20 5 members shall be appointed and commence membership on the new 20 6 investment board on July 1, 2002, as provided in section 20 7 97B.8A as enacted in this Act. The terms of these members 20 8 shall expire at the pleasure of the appointing authorities as 20 9 provided in section 97B.8A, as enacted in this Act. 20 10 d. The director of the department of personnel shall cease 20 11 membership on the investment board established under section 20 12 97B.8, Code 2001, on July 1, 2002. The treasurer of state 20 13 shall commence membership on the new investment board 20 14 established under section 97B.8A, and shall serve on the board 20 15 as provided in section 97B.8A, as enacted in this Act. 20 16 2. Initial appointments by the governor under this section 20 17 are subject to confirmation by the senate. If a vacancy 20 18 occurs as to a member of the investment board established 20 19 under section 97B.8A who is appointed by the governor prior to 20 20 the expiration of a term as provided in this section, the 20 21 governor shall appoint a member to serve the remainder of the 20 22 term so that the membership requirements of section 97B.8A, as 20 23 enacted in this Act, are fulfilled, and the appointment shall 20 24 be subject to confirmation by the senate. Upon the expiration 20 25 of a term established in this section, a member shall be 20 26 appointed in the manner and for a term of service as specified 20 27 in section 97B.8A, as enacted in this Act. Except as 20 28 otherwise provided in this section, the investment board 20 29 established under this section shall be subject to the 20 30 requirements of section 97B.8A, as enacted in this Act. 20 31 Sec. 20. BENEFITS ADVISORY COMMITTEE TRANSITION. 20 32 1. Effective July 1, 2001, and notwithstanding provisions 20 33 of section 97B.8B, as enacted in this Act, to the contrary, a 20 34 transition benefits advisory committee shall be created and 20 35 shall consist of the following voting members: 21 1 a. A member representing the Iowa state education 21 2 association. 21 3 b. A member representing the Iowa association of community 21 4 college trustees. 21 5 c. A member representing the school administrators of 21 6 Iowa. 21 7 d. A member representing the Iowa association of school 21 8 boards. 21 9 e. A member representing the retired school personnel 21 10 association. 21 11 f. A member representing the state police officers 21 12 council. 21 13 g. The director of the department of personnel. 21 14 h. A member representing the IPERS' improvement 21 15 association. 21 16 i. A member representing the American federation of state, 21 17 county, and municipal employees. 21 18 j. A member representing the Iowa state sheriffs' and 21 19 deputies' association. 21 20 k. A member representing the Iowa state association of 21 21 counties. 21 22 l. A member representing the Iowa league of cities. 21 23 m. A member representing the Iowa association of chiefs of 21 24 police and peace officers. 21 25 n. A member of the public with substantial pension 21 26 benefits experience as selected by the chief benefits officer 21 27 of the Iowa public employees' retirement system. 21 28 o. A member representing the department of management. 21 29 2. By July 1, 2002, the transition benefits advisory 21 30 committee shall issue a report to the Iowa public employees' 21 31 retirement system division concerning the rules to be adopted 21 32 by the division governing the benefits advisory committee as 21 33 provided in section 97B.8B, as enacted in this Act. The rules 21 34 should include provisions governing the selection of members 21 35 of the committee, the selection of voting members of the 22 1 committee, and any other provisions deemed necessary for 22 2 establishing the benefits advisory committee consistent with 22 3 the requirements of section 97B.8B. 22 4 3. The transition benefits advisory committee shall be 22 5 dissolved by July 31, 2002. 22 6 Sec. 21. AMENDMENTS CHANGING TERMINOLOGY – DIRECTIVES TO 22 7 CODE EDITOR. Except as otherwise provided in this Act, the 22 8 Iowa Code editor is directed to strike the words "department", 22 9 "department of personnel", and "department's" and insert the 22 10 words "division" and "division's" wherever the word 22 11 "department", "department of personnel", or "department's" 22 12 appears in chapter 97B of the Iowa Code and the reference to 22 13 "department", "department of personnel", or "department's" 22 14 means the department of personnel unless a contrary intent is 22 15 clearly evident. 22 16 Sec. 22. ADMINISTRATIVE RULES. To the extent not 22 17 inconsistent with this Act, the administrative rules 22 18 promulgated and adopted by the department of personnel 22 19 concerning the Iowa public employees' retirement system prior 22 20 to July 1, 2002, shall be the rules of the Iowa public 22 21 employees' retirement system division and shall remain in 22 22 effect on and after July 1, 2002, subject to the authority of 22 23 the division to modify or change the rules pursuant to Iowa 22 24 Code chapter 17A. 22 25 Sec. 23. Sections 97B.5, 97B.6, 97B.8, 97B.57, 97B.59, 22 26 97B.60, 97B.61, Code 2001, are repealed. 22 27 Sec. 24. EFFECTIVE DATE. This Act takes effect July 1, 22 28 2002. However, section 20 of this Act, establishing a 22 29 benefits advisory committee transition, takes effect July 1, 22 30 2001. 22 31 22 32 22 33 22 34 MARY E. KRAMER 22 35 President of the Senate 23 1 23 2 23 3 23 4 BRENT SIEGRIST 23 5 Speaker of the House 23 6 23 7 I hereby certify that this bill originated in the Senate and 23 8 is known as Senate File 497, Seventy-ninth General Assembly. 23 9 23 10 23 11 23 12 MICHAEL E. MARSHALL 23 13 Secretary of the Senate 23 14 Approved , 2001 23 15 23 16 23 17 23 18 THOMAS J. VILSACK 23 19 Governor
Text: SF00496 Text: SF00498 Text: SF00400 - SF00499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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